In the construction business, a typical secret competitive bidding procedure calls for several general contractors to rendezvous with an architect when, at a prescribed deadline, each general contractor gives the architect a sealed envelope containing their respective written bids for a particular project. The architect then opens the bids in the general contractor's presence and reads aloud the identity of each bidder and the amounts of each bid. Bids are typically passed around for each general contractor to see.
Such a procedure has several desirable characteristics. First, bids are secure and secret as between bidders. Each bidder only knows his own bid until the reading of bids at the awarding of the contract. Second, as the process is open to everyone in a public forum, bids cannot be submitted after the bid deadline. Thus, no one has an opportunity to change his bid after the bid deadline. Third, the bidder submitting the lowest bid is publicly identified, and the bid recipient is encouraged to commit then and there to awarding the contract to the lowest bidder. Finally, after the process has been completed the bidders can find out the amounts of their competitors bids, contributing to the improvement of their skills in subsequent bidding procedures.
Prior to the general contractor/architect bid opening, the general contractor formulates his bid by conducting a competitive sub-bidding procedure mandated by the architect, wherein subcontractors submit sub-bids to the general contractor until a prescribed deadline. The quantity of sub-jobs which must be performed is generally determined by the architect who divides the project into several dozen standardized divisions of work for which, in the case of a public job, any qualified subcontractor may submit sub-bids to one or more of the general contractors bidding on the job. Such sub-bids are usually submitted by telephone. This leads to a situation where the general contractor knows both the amount and who submitted the sub-bid, while the subcontractors only know the amount of their individual sub-bids. In such a situation it is easy for the general contractor to abuse his position of knowledge, and either award the contract for political reasons or to use his knowledge to coerce the subcontractors to lower their bids. As there is presently no way to compel general contractors to observe any rules, it cannot be assured that a qualified subcontractor who submits the lowest legitimate sub-bid will be awarded a contract.
Unfortunately, prior to applicant's invention, it has not been economically viable to correct this sad state of affairs. Assuming that the general contractor bids on two to three jobs a week, each having a dozen divisions, the sheer volume of administrative tasks involved in handling a sub-bidding procedure similar to the contractor/architect procedure would quickly overwhelm the offices of many a general contractor. Such a procedure would also be onerous for the subcontractor who typically bids on two to three jobs per week.
Applicant's invention provides a viable, secret, competitive, sub-bidding system which affords subcontractors all the safeguards that are in place in the general contractor/architect bidding procedure.